TaxTMI 
TaxTMI 
2014 (5) TMI 79
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....rm capital gain and long term capital gain on transfer of shares amount to business income. The Assessing Officer has treated the sale of shares which were shown under the heads "Short Term Capital Gain" and "Long Term Capital Gain" as "Business Income". 2. Facts in brief:- The assessee is an individual having income from business as partner in various firms, income from capital gain on transfer of shares & securities and income from other sources. As per the computation of income, following income were declared by the assessee. Income claimed as exempt Income offered for tax Business Income Rs. 6,18,316 Long term capital gain on transfer of shares and claimed as exempt u/s 10(38) of the Act Rs. 16,36,053 Sh....
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.... shown short term capital gain. Thus, the assessee was a trader and not an investor in shares. From the records, he further observed that in the earlier years also, the trend of the assessee was the same. He called for assessee's explanation with regard to the transaction of shares in respect to which the assessee has filed detailed explanation vide letter dated 20th October 2008 and 28th November 2008. The assessee's reply has been incorporated by the assessee in detail. The Assessing Officer rejected the assessee's explanation and after detail reasoning and relying upon various case laws, has treated the short term capital gain of Rs. 56,53,869 and long term capital gain of Rs. 16,36,053 as business income. 4. Before the learned Commissi....
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....n 3 months 2,78,48,607 2,93,66,948 15,18,340 Less: Misc. expenses 32,410 Total: 56,53,869 5. It was further submitted that there were only few shares which were transferred within a period of one week on which the assessee had earned Rs. 3,04,440. Thus, even under the head "Short Term Capital Gain", shares were held for substantial period. As regards the frequency of the transactions, it was submitted that the frequency had to be seen from scripwise and not on the basis of various companies. If that is taken into consideration, then there is a very less frequency in the transactions of purchase and sale. As regards the volume, it was submitted that due too large number of companies listed in the stock....
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.... without utilizing any borrowed funds, not claiming any expenditure for carrying. out the activity of investment in shares, maintaining separate records for trading in shares and investment, reflecting the amount of investment in shares in the Balance Sheet at cost and dividend earnings coupled with the fact that appellant's claim of earning of capital gain has been accepted in earlier years proves appellant's case. Therefore, the appellant cannot be held to be a trader in shares with respect to delivery based transactions. The Assessing Officer is accordingly directed to accept appellant's claim of Short Term Capital Gain and Long Term Capital Gain on share transactions where the delivery has been taken or given and security tr....
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....tted various reasoning given by the Assessing Officer and referred to the submissions which were made by the assessee before the learned Commissioner (Appeals) and also the findings given by the learned Commissioner (Appeals). 9. We have heard the rival contention, perused the relevant findings of the authorities below and the material available on record. As pointed out by the learned Counsel for the assessee, it is seen that the Tribunal in the case of assessee's husband other and family members has decided this issue in favour of the respective assessee, wherein identical facts were involved. A list of such cases are as under:- i) Shri Satpal Singh Sethi, ITA no.3650/Mum./2010 dtd. 30.09.2011;....